Across the public sector, there is a range of approaches to selecting a financial management solution, from a single organisation setting up full procurement themselves, to local, regional or national frameworks.
The challenge with frameworks however, is that we now have too many. It is perfectly understandable that a public sector organisation may want to set one up individually. It starts with the aspiration to save money on procurement. Organisations may also feel that their business is a little different to others and existing frameworks will not meet their needs, so they create their own.
Another driver is the pressure on the public sector to become more commercial. A framework, from which the founder can make a small income, can seem an attractive initiative; however, this can have a negative impact on both public sector organisations and suppliers. Adopting a new procurement framework can waste large amounts of time and money while also detracting from the real issues (which is how organisations can procure services at a lower cost in a tough, changing economic climate). This also puts pressures on suppliers, which may find themselves forced to pass on additional costs to customers.
The stringent terms and conditions often associated with these frameworks, which are often far tougher than is necessary, may deter many perfectly suitable suppliers, thereby restricting the customer’s choice. There are however, examples that we can learn from. East Lancashire Financial Shared Services is an organisation we partner with at Advanced. We are seeing a growing number of NHS trusts from all around the country joining their service. This NHS led organisation keeps the framework benefits within the NHS.
Another model we have seen work successfully in local government is where a public sector led organisation creates a structure in which, as more organisations join, the unit price for each participant reduces. In a time of constrained budgets, with no doubt more cuts on its way, it is ever more important for the public sector to take a step back. To use the frameworks that already exist, where possible, and move towards a shared model to build trust.
Find Advanced on the following frameworks:
CCS RM1042 (Corporate Software Solutions) https://ccs-agreements.cabinetoffice.gov.uk/suppliers/advanced-business-software-solutions-ltd
London Procurement Partnership (Transactional Finance, Accountancy and Transactional Procurement) http://www.lpp.nhs.uk/categories/estates-facilities-professional-services/